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Government & Politics

Community Legal Aid Sues Ohio Over Practices that Double Tax Citizens

photo of tax paperwork
401(K) 2013
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Community Legal Aid alleges the state is engaging in practices that double taxe primarily low-income tax payers.

Community Legal Aid is suing the state over a practice it says double taxes citizens. This practice primarily impacts low-income taxpayers who don’t have access to their W-2s, the end of year statement that shows your earnings.

When a taxpayer can’t provide the W-2 information, the state processes the tax return as if the taxpayer paid no state income tax. But the employer has already withheld the state income tax from paychecks. Then, the employee gets a bill for taxes most are unaware they’ve already paid.

Attorney Dana Goldstein says this practice is a result of the state not properly crediting taxpayers’ accounts when employers pay the state income tax, which is required under state law.

“So, what they need to do is hire a data miner — or what we’re hoping they do is hire a data miner, which shouldn’t be too difficult in today’s computer world — to be compliant,” she said.

Goldstein also hopes the lawsuit will result in the state notifying taxpayers of potential account balances and potential tax returns, which is also required under state law.

Goldstein on state not keeping accurate records

“Why don’t they tell them of the potential refund? Because they don’t keep accurate records. Because they don’t properly credit taxpayers accounts when the employer pays the state income tax to the state of Ohio,” she said.

Goldstein thinks the lawsuit should result in new policies that properly credit taxpayers’ accounts.